Small biz: brothers make Coda Coffee a company to watch

Brothers Tommy and Tim Thwaites were both in their 20s when they launched Coda Coffee Co. five years ago with a roaster built in 1984 in Brazil that they bought for $60,000, rebuilt and still use today. Their other major piece of equipment was Tim's Dodge Dakota, which they used to deliver the roasted beans.

Tommy laughs when asked about the long hours they must have put in at the outset when it was just the two of them. "Well, in the beginning we'd stand around a lot more than we worked, just because there wasn't much to do," he says. "Of course, you could always hit the phones or go out selling. That never goes away when you have a business. But sometimes at noon we were like, ‘OK, the three customers we have are officially happy ....'

"But quickly it became a 60- to 70-hour a week job, and it really hasn't let up too much from that."

These days Coda Coffee, located in an 8,000-square-foot warehouse off East 58th Avenue east of I-25 in unincorporated Adams County, boasts 17 employees and is on track this year for sales of $3 million. The wholesale coffee roaster is also one of this year's up-and-coming "50 Colorado Companies to Watch" profiled in this issue, starting on page 32.

The company was growing about 90 percent annually until last year when the business grew a "mere" 40 percent amid the economic downturn. Coda offers organic fair-trade beans and distributes nationally and internationally to cafes, offices and restaurants. But roughly half of its business comes from private-label clients, including Whole Foods and King Soopers.

Although Tommy Thwaites says the company tends not to set goals because, "We've done goals and we beat them every time by quite a bit," he adds, "We hope to hit $5 million in 2011 and just go from there. A big goal of mine is to get to $1 million a month."

Success hasn't come as a surprise to the brothers, probably because although Tommy now is just 34 and his brother only 29, they've both been in the wholesale coffee business since they were teens growing up in the coffee mecca of Seattle. Both worked their way through college - Tommy earning a degree in physics and mathematics and Tim in aviation management - working at Seattle-based Dillanos Coffee Roasters.

They did everything from sweeping floors to deliveries to roasting beans to manning the booths at trade shows. Tommy eventually rose to executive vice president and Tim to the roast-master position at Dillanos.

Growing up, both brothers at one time wanted to be pilots, and both have their pilot's licenses today, but they found true enjoyment in the coffee industry. They also knew they had the know-how and the contacts to make it as entrepreneurs in the wholesale coffee roasting business. So did their father, Tom Sr., enough that he invested his 401(k) retirement money in Coda Coffee Co.

"He saw that we really enjoyed the industry, enjoyed what we did and knew we could do it," Tommy says. "He was a retired Boeing employee. He didn't hate work, but he didn't really ever enjoy it. He saw an opportunity for my brother and me to enjoy work every day and wanted us to take advantage of that."

Both brothers are avid runners and endurance athletes - Tommy often bikes 17 miles to work - and at the outset they sought to build brand recognition for Coda by giving out free coffee at running events and handing out coupons for cafes that carried Coda coffee. Recently they've developed a presence on Facebook, Twitter and LinkedIn at www.codacoffee.com. They've also expanded the business to include iced tea by partnering with Arizona-based China Mist to become one of that company's two distributors in Colorado.

Tommy Thwaites looks back to the time when he was 18 and working as a small-gas engine mechanic, fixing lawnmowers and chainsaws and the like, to raise money before starting college. He recalls his dad's unfavorable view of his decision to quit that job to work at Dillanos, then an upstart coffee roaster with an uncertain future operating out of an abandoned fruit store.

"He thought I was crazy," Tommy Thwaites says. "He's like, ‘You're going to need something stable while you're going to school.' It ended up essentially changing my life, getting into the industry. Now the three of us own Coda. It's kind of funny."

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Mike Taylor is the managing editor of ColoradoBiz. He writes about small-business money issues and how startups are launched. Email him at mtaylor@cobizmag.com.

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